The Virtual Senate and Brazil

[Brad De Long]

>Brad De Long wrote:
>
>>try to encourage inflows of foreign direct investment--for inflows of
>>foreign direct investment are one of the best ways to transfer technology
>>from the industrial core to the periphery, and the technology gap between
>>the industrial core and the periphery is now wider than it has ever been
>>before.
>
>...as FDI flows have increased. What evidence is there for real tech xfr
>through FDI? Korea was very restrictive about investment inflows, and
>developed considerable technical skills; Mexico has been wide open for 20
>years and has little other than a low-wage assembly sector to show for it.
>It'd make more sense for development authorities to spend a few mil sending
>local kids to MIT on the condition they return home to work.
>
>Doug

Sending local goods to MIT is excellent as long as they come back; using
earnings from domestic exports to buy machine tools (and hire people to use
them) is very good; but my reading of the literature was that FDI was still
a good way to acquire technology--albeit not as good because the stuff that
shows up is stuff that is useful to the multinational and its purposes, and
has fewer potential external benefits for the rest of your own economy...

Brad